Statements in this presentation regarding future or estimated reserves
and other mineralization; projected quantities and periods of future production;
production rates; production, capital and other costs; and other estimates of
future results or activity are forward looking statements that involve risks and
uncertainties that could cause actual results to differ from estimated results.
Actual results could differ materially depending on political events, labor
relations, currency fluctuations and other general economic conditions, market
prices for the Company's products, timing of permits and other government
approvals and requirements, changes in expected operating conditions, lower than
expected ore grades, unexpected ground and mining conditions, availability and
cost of materials and equipment, and risks generally inherent in the ownership
and operation of mining properties and investments in foreign countries. See the
Company's Preliminary Proxy Statement filed with the Securities and Exchange
Commission on January 26, 1998, "CAUTIONARY STATEMENTS," for a more detailed
discussion of factors that may impact on expected future results.
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Synergies
o Strengthens Homestake's Capabilities in Australia
o Will expand operations group in Perth
o Leverage complementary technological expertise
o Plutonic's highly successful exploration team
o Achieve Over $20 Million in Annual Cost Savings By End of 1998
o Will close corporate office and consolidate in Perth
o Reduction in exploration expenditures from elimination of
redundant/duplicate functions and general reduction in budget
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Ranking of North American Gold Producers
[Bar chart showing ranking of North American Gold Producers. Graph reflects in
descending order of greater production to less production as follows: Newmont*,
Barrick*, Homestake & Plutonic, Placer Dome*, and Homestake.]
* Based on information compiled by Homestake.
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World Cost Curve
Western World Cash Cost for Gold Production
[Graph of Western World Cash Cost for Gold Production for 1986 and 1996, showing
Homestake position in 1986 and 1997, Darlot Mine and Plutonic Mine.]
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Ruby Hill
[Picture of Ruby Hill Mine.]
o Construction started in February 1997
o First Gold Pour was on November 6, 1997
o Mine is Now Fully Operational
o Gold production in 1998 is estimated at 110,000 ounces at a Cash Cost of
$123/oz
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Attractive Exploration Opportunities
o Homestake Will Have a Large Number of Attractive Exploration Prospects in
Western Australia
o Australia's most prolific gold province where Plutonic and Homestake
have significant operations and experience
o Will allow shift from grassroots emphasis to more advanced projects in
Plutonic's portfolio
o Exploration Potential at Existing Operations
o Finding cost in recent years around US$10/oz
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Strategy For Growth
o Consider Acquisitions Large and Small Only If Accretive (or Expected to be
Accretive Soon) and Enhance Growth Opportunities
o Continued Strong Support for Exploration
o Maximize Performance of Operations
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Market Can Not Long Ignore Changes in Homestake. As Continued Exploration
Success, New Mine Development, Lower Costs, Improved Profitability and Above
All, Sustainable Growth, Become Evident, These Improved Fundamentals Should
be Reflected in Share Price.
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Homestake vs. S&P Gold Index
[Graph comparing the S&P Gold Index with Homestake's Stock Price from 1/2/98
through 2/6/98 using a 1998 Base equal to 100 and a Weighted Monthly Average.
The graph depicts Homestake's Stock Price valued higher at each point than the
S&P Index. Specifically, on 2/6/98, Homestake was at 108 and the S&P Index was
at 100.]
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CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT. This
document contains forward looking statements that are based on management's
expectations and assumptions. They include statements preceded by the words
"believe,""estimate,""expect,""intend,""will," and similar expressions, and
estimates of reserves, future production and mine life, costs per ounce,
reclamation and remediation costs, dates of construction completion, costs of
capital projects and commencement of operations, exploration costs, and taxes.
Actual results may differ materially from expectations.
Among the important factors that could cause actual results to differ materially
are the following. Reserve estimation is an interpretive process based on
drilling results and past experience as well as estimates of ore characteristics
and mining dilution, prices, costs of mining and processing, capital
expenditures and many other factors. Actual quality and characteristics of ore
deposits cannot be known until ore is actually mined. Reserves change over time
to reflect actual experience. Grades of ore processed at any time may also vary
from reserve estimates due to geologic variations within areas mined. Production
and mine lives may vary from estimates for particular properties and for the
Company as a whole because of changes in reserves, variation in ore mined from
estimated grade and metallurgical characteristics, unexpected ground conditions,
mining dilution, labor actions, and government restrictions. Cash costs may vary
due to changes from reserve and production estimates, unexpected mining
conditions, and changes in estimated costs of equipment, supplies, utilities,
labor costs and exchange rates. Noncash cost estimates, based on total capital
costs and reserve estimates, change based on actual amounts of unamortized
capital and changes in reserves. Cost savings estimates are based on expected
ability to eliminate duplicative expenses, anticipated reduction in
administrative facilities and relocation of certain personnel. Actual cost
savings may be lower than estimated and realization of savings may be lower than
expected.
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